Feds react to oil train derailment with new regulations

Firefighters and rescue personnel work along the tracks where several CSX tanker cars carrying crude oil derailed and caught fire along the James River in Lynchburg, Va., Wednesday, April 30./ AP Photo

The U.S. Department of Transportation has issued new rules for railroad carriers transporting crude oil, after another in a series of hazardous derailments of trains hauling oil tankers.

Coming a week after a CSX train derailed in Lynchburg, Virginia, and spilled crude oil into the James River, the rules require trains carrying 1 million gallons or more of crude oil to notify local emergency responders of the approaching shipment.

“By this Order, DOT is requiring that each railroad carrier provide the State Emergency Response Commission (SERC) for each state in which it operates trains transporting 1,000,000 gallons or more of Bakken crude oil, notification regarding the expected movement of such trains through the counties in the state,” according to the order issued Wednesday.

While the emergency communication rules are mandatory and effective immediately, the federal order did not force railroads and shipping companies stop using an aging class of tanker cars known as DOT-111. Instead, the transportation department's Federal Railroad Administration and Pipeline and Hazardous Materials Safety Administration issued a joint safety advisory “strongly urging” the industry to upgrade to newer tanker cars.

“All options are on the table when it comes to improving the safe transportation of crude oil, and today's actions, the latest in a series that make up an expansive strategy, will ensure that communities are more informed and that companies are using the strongest possible tank cars,” Transportation Secretary Anthony Foxx said in a statement announcing the oil-rail transport rules.

Jim Beardsley, Washington-based global leader of Marsh's rail practice, said the order was not a surprise given the surge in crude oil being shipped over the rails.

%%BREAK%%

“With the volume rising, we are going to have more activity,” Mr. Beardsley said. “The safety rates for the industry are excellent, but the more volume you put on the rails, the more you are going to have incidents.”

Russell Quimby, Omaha, Nebraska-based president of railroad services consultancy Quimby Consulting L.L.C., said that with an estimated 78,000 of the 92,000 tank cars moving flammable liquids daily in need of either retrofitting or replacement, wide-scale safety improvements will take time.

“The last major update to tank cars was in the early 1980s, so now there is a push to go to double-shelled tank cars, which are more crash-worthy,” Mr. Quimby said. “It's going to take the industry at least five years to replace the older cars.”

Mr. Beardsley said there was no quick fix to the issue.

“The recommendations and executive order show that this is a high-profile issue, and the regulators are taking what I think is prudent action,” Mr. Beardsley said. “They recognize that the process of improving the movement of these commodities is going take some time.”